Principle Rears Its Ugly Head At The FCC

The Federal Communications Commission under Republican Chairman Kevin Martin has been a government regulatory agency driven by principle -- the principle most often being, "whatever Big Business wants, Big Business gets." Unfortunately for Chairman Martin, he was prevented yesterday from giving AT&T what it wants most -- approval of its extremely dubious merger with BellSouth.

The Federal Communications Commission under Republican Chairman Kevin Martin has been a government regulatory agency driven by principle -- the principle most often being, "whatever Big Business wants, Big Business gets." Unfortunately for Chairman Martin, he was prevented yesterday from giving AT&T what it wants most -- approval of its extremely dubious merger with BellSouth.As I wrote last week, Chairman Martin had hoped to force a vote that would present the incoming Democratic-controlled Congress with a fait accompli. Instead, because of an untimely outbreak of conscience on the part of commission member Robert McDowell, the FCC remains deadlocked, and the new Congress will get to put its oar in on the real issue in the case -- Internet Neutrality.

The ever-resourceful Chairman Martin was able to give AT&T a little consolation present, in the form of a commission ruling clearly intended to help Big Telco in its Mothra-vs-Godzilla battle to the death with the cable TV giants.

The decision orders local government agencies considering applications from telcos for broadband content-delivery services -- essentially new cable-TV franchises -- to make their decisions within 90 days and to avoid putting any "unreasonable" conditions on the deals.

The ruling does have a teeny little problem with fairness that will probably mean it will face a court challenge -- the time restrictions on local decision-makers apply only to telco applications, not cable companies'. But then, fairness, or even the appearance of fairness, has never been a big deal with Chairman Martin, who announced the anti-competitive decision by proclaiming, "It is critical to make sure we're doing all we can to bring competition to the marketplace."

An article by The Financial Times notes that the result of Commissioner McDowell's principled decision is that "AT&T will be forced to succumb to at least some of the demands of the FCC's two Democratic commissioners, who are expected to have the backing of the new Democratic majority in the Congress on issues ranging from net neutrality to "special access" price freezes, covering competitors' access to its network."

Just because the server market's in the doldrums doesn't mean innovation has ceased. Far from it -- server technology is enjoying the biggest renaissance since the dawn of x86 systems. But the primary driver is now service providers, not enterprises.